Business Demography 2016
A briefing note based on the analysis of the ONS Business Demography count 2016.
Context
Business Demography is the official count of the number of ‘active enterprises’ (The active stock of businesses)within the country as well as the number of business ‘births’ and ‘deaths’. The data also contains information relating to the survival rates of businesses over the last five years.
Data is available from 2010 - 2016[1] by geographic size down to district level.
Historic data back to 2004 has been kept on record by the author.
The Importance of this data to the Council
Research of business figures within Burnley and its comparison with neighbouring authorities, the Lancashire LEP, the North West and Great Britain is required for analysis of the local economy for strategy development and evaluation purposes. In addition, the data may strengthen the Council’s position to government when bidding for funding.
Notes on the data
The starting point for the calculation of business demography data is the concept of active businesses in a reference year. These are defined as businesses that had either turnover or employment at any time during the reference period.
New business registrations are referred to as business births and the birth rate is calculated using the number of births as a proportion of the active businesses.
Businesses that have ceased to trade (identified through de-registration of the administrative units, that is, VAT and Pay As You Earn (PAYE)) are referred to as business deaths and the death rate is calculated using the number of deaths as a proportion of the active businesses.
For the purpose of this release the term “business” is used to represent an enterprise. An enterprise can be defined as the smallest combination of legal units (generally based on VAT and/or PAYE records) that is an organisational unit producing goods or services, which benefits from a certain degree of autonomy in decision-making, especially for the allocation of its current resources. An enterprise carries out one or more activities at one or more locations. An enterprise may be a sole legal unit.
The Business Demography publication reference period records the number of active businesses over a yeartaken from a specific date in December 2015 to the same date in December 2016.
Please note that all data are rounded by the ONS to protect confidentiality. The figures in the tables are rounded individually therefore the sum of component items may be slightly different to the totals shown.
Business births and deaths by broad industry group
The highest rate of Business births within the UK economy in 2016 continued to be within business administration and support, at 23.1%, compared with a rate of 20.4% in 2015. The second-highest rate occurred again occurred in transport and storage at 20.3%, the same rate as in 2015.
The highest business death rate within the UK economy, at 17.0%, was again in finance and insurance, compared with 13.3% in 2015. This was followed by business administration and support, at 15.4%, compared with 10.1% in 2015. Within the overall number of business deaths, professional, scientific and technical had the largest number, at 62,000 (of which 26,000 came from management consultancy activities) followed by business administration and support, at 43,000.
This industry breakdown is not available at local authority level.
ONS Business Register and Employment Survey (BRES) showed that in 2015 Burnley achieved growth in:
Growth 2015-2016Sector / % growth / employees
Transport & storage (inc postal) / 20% / 250
Accommodation & food services / 12.5% / 250
Financial & insurance / 15.8% / 75
Professional, scientific & technical / 27.3% / 375
And lost employment in:
Loss 2015-2016Sector / % growth / employees
Construction / -30.8% / -500
Wholesale / -20.0% / -375
Motor Trades / -22.7% / -125
Arts, entertainment, recreation & other services / -13.3% / -250
Accuracy
Business demography is an extract from the IDBR and is not subjected to imputation or estimation.
Checks include, matching HMRC VAT and PAYE information, checking business locations and structures match PAYE and VAT information, employment data are correct, businesses are active, allocating businesses to correct standard industrial classifications, etc
The source data for Business Demography is an extract of active units held on the IDBR. The IDBR, which was introduced in 1994 covers over two million businesses in all sectors of the UK economy.
In addition, the ONS Business Register Employment Survey (BRES) and other ONS surveys supplement these administrative sources, identifying and maintaining the business structures necessary to produce detailed industry and small area statistics. It should be noted that BRES is the only source of local unit (site) information.
Summary
For the year 2016 the number of active enterprises in Burnley has grown. The number of new business births has grown from the previous year and the number of business deaths has also grown (a negative). Overall Burnley achieved a Net Growth of businesses in 2016 of 50.
Table 1
Burnley / 2015 / 2016 / Change (Number) / Change(%)
Active enterprises / 2,705 / 2,800 / 95 / 3.5%
Births / 325 / 340 / 15 / 4.6%
Deaths / 270 / 290 / 20 / 7.4%
Growth
Births & Deaths
Net Loss/Gain
(Sum: Births minus Deaths) / +55 / +50
Overview of the data for 2016
Active enterprises 2004 – 2016
The business stock within Burnley, that is, the number of ‘active enterprises’, increased by 30, or 1.1% between 2015 and 2016. The total number of active enterprises in 2016 was 2,705.
Graph 1 shows the change in the number of active enterprises since 2004.
The number of enterprises grew by 10.3% throughout the years 2004-2007 peaking at 2,620 active enterprises in 2007. This number then fell from 2007 to 2012, a reflection of the wider problems in the national economy during this time, bottoming out at 2,470 active enterprises in 2012. In the two years following 2012 Burnley saw a surge in its business stock expanding to 2,675 in 2014, a growth of 8.3% over a two year period (2012-2014), taking the number of active enterprises higher even than in 2007. In the most recent data period, 2014-2016 Burnley has witnessed continued growth again, 4.7% growth over the two year period, rising to 2,800 active enterprises.
Graph 1
The change in the number of active enterprises in Burnley in the most recent 12 month period(2015-2016)showed that Burnley ranked 6th for growth amongst all Lancashire authorities.
When looked at over a 5 year period (2011-2016) Burnley ranked 3rd of all Lancashire authorities.
% growth in active enterprises2015-2016
1 years / 2011-2016
5 years
% / %
Preston / 5.2 / Blackburn with Darwen / 14.4
Blackburn with Darwen / 4.5 / Chorley / 13.9
Pendle / 4.1 / Burnley / 12.0
Fylde / 3.8 / Preston / 10.9
Lancaster / 3.6 / West Lancashire / 10.0
Burnley / 3.5 / Pendle / 9.3
Chorley / 3.3 / South Ribble / 8.1
Rossendale / 3.3 / Ribble Valley / 6.3
Hyndburn / 2.9 / Lancaster / 5.7
West Lancashire / 2.6 / Fylde / 5.5
South Ribble / 2.5 / Wyre / 4.0
Ribble Valley / 2.0 / Rossendale / 3.7
Wyre / 1.8 / Blackpool / 2.7
Blackpool / 1.4 / Hyndburn / 2.5
Great Britain / 6.1 / Great Britain / 21.5
North West / 6.5 / North West / 19.5
Lancashire LEP / 3.2 / Lancashire LEP / 8.1
Table 2
Comparing Burnley against Lancashire, the North West and Great Britain. Burnley was achieving much stronger growth to its business stock than its comparators from 2004/05 through to 2005/06 and when the national economy suffered from decline, the impact on Burnley was that the growth in its business stock fell faster and harder than its comparators through 2006/07 to 2009/10.
When growth finally resumed in 2012/13 Burnley far exceeded the Lancashire average. Between 2013-2014 Burnley exceeded all its comparators, the first time this had happened since 2005-2006, although it performed poorly against its comparators in the following year.
In the most recent 12 month period, 2015-2016Burnley has performed slightly better than the Lancashire average, but both have not performed as well as the North West or Great Britain averages.
Graph 2
Active Enterprises per 10,000 resident population (age 16+)
In 2016 there were 402 Active Enterprises per 10,000 working age population in Burnley. This is 14 more than the previous year and 26 more than the last peak in 2007. Since 2004 the number of active enterprises per 10,000 population has increased by 59.
Graph 3
Using active enterprises per 10,000 population allows us to compare Burnley against other areas. When ranked (highest to lowest) Burnley comes in 11th place for active enterprises per 10,000 population in the 14 Lancashire local authorities. This is the same position as the previous year.
Graph 4 – (% is growth on previous year)
The higher the number of active enterprises within the population as compared to other towns and cities, suggests an established spirit of enterprise within the population.
With 402 active enterprises per 10,000 of the working age population in 2016, Burnley does not appear to be as enterprising as the North West or Great British average.
Burnley also has less enterprises per 10,000 of the working age population in 2016 than any of its Pennine Lancashire neighbours except for Hyndburn. When compared against the rest of Lancashire, Burnley scores higher than Lancaster and Blackpool only.
Table 3
Active enterprises per 10,000 resident pop (16+)Year 2016
Number
Ribble Valley / 629
Fylde / 523
Chorley / 497
Preston / 488
Rossendale / 479
West Lancashire / 478
South Ribble / 457
Blackburn with Darwen / 449
Wyre / 438
Pendle / 411
Burnley / 402
Hyndburn / 384
Lancaster / 378
Blackpool / 370
Great Britain / 536
North West / 472
Lancashire LEP area / 448
Graph 5 shows the change in the number of active enterprises per 10,000 population for Burnley, Lancashire, North West and Great Britain since 2004. All have followed a similar pattern.
Graph 5
Births
The number of business births in in Burnley in 2016 was 340. This is 15 more than the previous year.
The number of new businesses starting up (Births) in Burnley has increased significantly since 2010 but growth has been slower since 2012.
Graph 6 shows this change in the number Business Births in each given year since 2004.
Graph 6
The percentage change in new business births each year can be thought of as an ‘entrepreneurial rate’.
Two Lancashire districts saw a fall in the number of new business births between 2015-16 and two saw no growth at all.Overall Lancashire only grew by 3.9%.
Burnley ranks #7of 14 Lancashire authorities (high to low) for entrepreneurship (new business growth) compared to the previous year.
% Change in number of new business births on previous year (entrepreneurial growth)2015-2016
1 year / 2011-2016
5 year
% / %
Rossendale / 14.3 / Pendle / 44.2
Ribble Valley / 13.8 / Blackpool / 40.0
Pendle / 11.9 / West Lancashire / 39.5
Chorley / 5.7 / Blackburn with Darwen / 37.5
Hyndburn / 5.4 / Lancaster / 35.1
Lancaster / 5.1 / Chorley / 33.7
Burnley / 4.6 / Preston / 28.6
South Ribble / 4.5 / Fylde / 25.4
Fylde / 3.7 / Rossendale / 23.1
Blackpool / 3.5 / Hyndburn / 22.9
Blackburn with Darwen / 2.9 / Ribble Valley / 22.2
Preston / 2.1 / Wyre / 22.2
West Lancashire / -3.6 / South Ribble / 19.2
Wyre / -5.4 / Burnley / 17.2
Great Britain / 8.2 / Great Britain / 58.5
Lancashire LEP area / 3.9 / North West / 63.6
North West / 15.2 / Lancashire LEP area / 30.1
Table 4
Business births per 10,000 resident population (age 16+)
Looking at the number of business births per 10,000 of the working age population. A high number of business births within the population compared with elsewhere would suggest that a population is being entrepreneurial.
With 48.8 business births per 10,000 of the working age population in 2016, Burnley has a lowerentrepreneurial ratethanLancashire, the North West or Great Britain.
In 2016 Burnley had more business births per 10,000 of the working age population than Wyre, Hyndburn and Lancaster.
Overall Burnley ranks 11th in Lancashire (highest to lowest).
Births of new enterprises per 10,000 resident pop (16+)Year 2016
Number
Ribble Valley / 67.8
Fylde / 63.9
Blackburn with Darwen / 63.4
Preston / 63.2
Chorley / 59.4
Rossendale / 56.9
West Lancashire / 56.4
Pendle / 52.4
Blackpool / 52.3
South Ribble / 51.7
Burnley / 48.8
Wyre / 47.4
Hyndburn / 46.2
Lancaster / 43.5
Great Britain / 78.9
North West / 71.8
Lancashire LEP area / 54.9
Table 5
Graph 7 shows the number of new business births per 10,000 population since 2004 for Burnley, Lancashire LEP area, the North West and Great Britain.
Graph 7 - Business Births per 10,000 population
Business Deaths
The number of business failures , that is the number of business ‘deaths’ In Burnley in 2016was 290. This is 20more business failures than the previous year, growth of 7.4%%.
Graph 8 shows the change in the number of business deaths since 2004. Deaths fall almost consistently from 2009 to 2013, increased quite sharply in the year to 2014and have changed slightly in both directions in the previous two years.
It is interesting to note that throughout the period of national recession from 2009 (the UK officially entered recession in January 2009)and beyond, the number of business failures (deaths) in Burnley actually decreased – when they might have been expected to increase. The number of business births on the other hand was affected.
Graph 8 (% is growth from previous year)
As shown in Graph 8. The number of business deaths increased in Burnley between 2015 and 2016 but a number of other Lancashire authorities had higher increases in business deaths.
Table 6
% Change in number ofbusiness deaths on previous year2015-2016
1 year / 2011-2016
5 year
% / %
Preston / 20.4 / Blackburn with Darwen / 24.0
Fylde / 20.0 / Pendle / 19.6
Lancaster / 14.1 / Burnley / 16.0
Pendle / 13.0 / West Lancashire / 15.6
Hyndburn / 12.2 / Hyndburn / 12.2
South Ribble / 11.3 / Chorley / 12.1
Blackburn with Darwen / 9.2 / Ribble Valley / 11.1
Burnley / 7.4 / South Ribble / 7.2
Ribble Valley / 5.3 / Rossendale / 6.0
Rossendale / 3.9 / Preston / 4.6
West Lancashire / 2.0 / Wyre / -2.5
Wyre / 0.0 / Lancaster / -6.3
Chorley / -3.8 / Blackpool / -11.7
Blackpool / -4.5 / Fylde / -12.4
North West / 11.5 / North West / 27.7
Great Britain / 15.8 / Great Britain / 43.5
Lancashire LEP area / 7.3 / Lancashire LEP area / 5.3
Business deaths per 10,000 resident population (age 16+)
Comparing business deaths per 10,000 population with Lancashire, the North West and Great Britain. Over time all four have followed a similar jagged path with ups and downs from 2004-2009. All 4 areas saw a spike in 2009 and a decrease following this to 2013.
The graph shows that Burnley has historically had fewer business deaths than its comparator areas (a positive thing) and this became more pronounced between 2009 and 2013 when the gap between Burnley and the other areas diverged.
Business deaths have begun to rise in Burnley between 2013 and 2016, like they have in other areas also, however the increase is much steeper in the other areas. More businesses are failing than within Burnley.
Graph 9
Death rate
The death rate (%), the number of active enterprises ceasing trading (deaths) as a proportion of the number of active enterprises, in Burnley in 2016, was 10.4%
The death rate in Burnley in 2016ranked 10th in Lancashire. The death rate for Burnley was less than the Lancashire LEP area, the North West and Great Britain.
Death rate (%)The number of active enterprises ceasing trading as a proportion of the number of active enterprises.
Year 2016
%
Blackpool / 12.6
Preston / 12.2
Blackburn with Darwen / 11.8
West Lancashire / 11.6
Fylde / 11.4
Hyndburn / 11.2
Chorley / 11.0
South Ribble / 10.8
Pendle / 10.4
Burnley / 10.4
Rossendale / 9.9
Lancaster / 9.8
Ribble Valley / 9.8
Wyre / 9.6
North West / 11.7
Lancashire LEP area / 11.0
Great Britain / 11.6
Table 7
Graph 10
Comparing Burnley against Lancashire, the North West and Great Britain by measuring the number of business deaths as a proportion of active enterprises shows an almost identical trend for all 4 areas; busineses failures increasing in the run up to, and throughout the financial crises and peaking in 2009. Business failures have decreased since then, to the year 2013. Busines deaths have begun to increase once again in all areas.
Graph 11
Business Births and Deaths - Net Loss/Gain
The Net Loss/Gain of businesses in Burnley, that is the number of business births in one year minus the number of business deaths in the same year, was 50 in 2016. Overall, 50 additional businesses were gained.
Graph 12shows that this is the highest Net Loss/Gain for Burnley since 2004.
Graph 12
Business Survivals
The Business Demography 2016 contains business survival data up to a 5 year period, from 2010 to 2015. Meaning there is one full year of 5-year survival records for businesses who were ‘born’ in 2010 and have survived to 2016. However with the addition of this authors own annually collected records historical data is available going back to 2007, providing us with 5 complete sets of 5 year data.
- For businesses born in 2007, 08, 09, 10, 11 there is five years worth of survival data
- For businesses born in 2007, 08, 09, 10, 11, 12 there is four years worth of survival data
- For business born in 2007, 08, 09, 10, 11, 12, 13there is three years, etc.
- There is no data for 2016 as the companies born in this year had not yet completed a full years trading when the data was compiled.
Business survivals after one year of trading
In 4 out of 9 years;2007, 2008, 2009 and 2011 Burnley had a higher percentage of business survivals after one year of trading activity than the county, regional or national level. In 2010, 2012, 2013 and 2014 Burnley’s 1 year survival figures fell lower than each of the listed comparators. In 2015 Burnley had a higher survival rate than the North West by 0.1 percentage points and exceeded that of Great Britain.
Graph 13
Business survivals after 2 years of trading.
In 3 out of 8 years; 2007, 2009 and 2011Burnley had a higher percentage of business survivals after two years of trading activity, than the county, regional or national level. In 2008 Burnley was only 0.1 percentage points behind Lancashire.
Graph 14
Business survivals after 3 years of trading
With the three year survival figures Burnley only manages to beat the three listed comparators in 1 out of 5 years (2009). Burnley’s 3 year survival figures are equal to Lancashire’s in 2007. In 2013 Burnley was equal with the North West.
Graph 15
Business survivals after 4 years of trading
With the 4 year survival figures it is noticeable that the survival rate had been falling year on year for all the areas in Graph 15 between 2007 and 2010. It was unclear why this was happening. All have performed better in the most recent figures, 2011 and 2012.
In the 4 year figures Burnley performs well in 2007, 2008 and 2009 but less so in 2010, 2011 and 2012.
Graph 16
Business survivals after 5 years of trading
After 5 years of trading, Burnley firms had a higher or equal chance of survival than the county, region or national average in 2007, 08 and 09. In 2010 the survival rate was less so. In 2011, although Burnley performed less well than the comparator areas, the number of business survivals was only 0.4 percentage points less than the Lancashire average.